To be honest I wasn’t as interested in what the USDA monthly World Ag Supply and Demand Estimates reports had in it as what I usually am. I mean how does any report with 30 day old data compete with the last couple of weeks.
Some highlights of the March WASDE. Wheat: World production was increased 2.1mt (now 778.52mt), carry in was increased 400kt, imports reduced, domestic consumption reduced and exports reduced, the net result a 3.3mt increase in carry over.
In most cases a bearish report like this would have hit the market and created some downward pressure. So to see the Chicago futures market fall limit down on the nearby is maybe somewhat justified by the data, maybe 10c of the 85c drop is fundamental…. maybe. Probably best to keep the eye on the new crop futures contract, the Dec 22, which fell around 41c for SRWW and 68c for HRWW, neither insignificant reductions.
The Russo / Ukraine war, as some have penned it, continues to be the major influence by a country mile. Talk of possible negotiations and cease fires were all considered bearish. Talk that Ukraine were writing export permits and Russia was trying to reassure buyers of wheat supply from the Azov were all indicating that maybe it was time to take a little profit from this exceptional rally.
Some price destruction of demand into both the Middle East and Asia is putting fundamental pressure on the wheat market. Something tells me that this volatility isn’t going to disappear overnight though, there’s no money to be made in a nice flat, predictable market is there.
There was some suspicious air travel from Ukraine to Romania overnight, complete with military escort and who’s on the direct flight from Washington to Warsaw in the US Airforce 757, and why was every commercial plane in the area put in a holding pattern as the 757 came in to land. I’m finding Flightradar24, an aircraft tracking website very interesting at present. It’s the planes that appear and disappear quickly that raise the eyebrow.